Leave Entitlement in Malaysia

  • Employment
Leave Entitlement in Malaysia

Unlike many other jurisdictions, the employment legislation in Malaysia provides leave entitlement only to those who earn below a certain income level or are involved in manual labor. At the same time, all other non-manual workers with higher incomes should rely solely on the terms of their employment contract.

The definition of employees under the Employment Act 1955 of Malaysia includes those who are employed as manual labor workers, notwithstanding their salary level as well as non-manual workers whose monthly income doesn’t exceed RM2,000. The Act provides several types of leave entitlements, including holiday leave, annual leave, sick leave, and maternity leave, as well as other optional leaves.

Other employees whose income exceeds the above threshold should rely exclusively on the terms of their labor agreements. For this reason, knowledge of regulations for leave entitlement in Malaysia becomes even more critical for signing any employment contract to make its terms at least equivalent or even better than those provided by the law.

Types of Leave

The Employment Act of 1955 provides several types of leave entitlements, which include:

  • public holidays,
  • paid leave,
  • sick leave,
  • maternity leave,
  • optional leave entitlements.

In addition, those employees who have exhausted other forms of leave and still need to be absent from work due to personal matters can ask their employers for an opportunity to take unpaid leave, which can be granted solely on the employer’s discretion.

Public Holidays

According to the legislation, every employee is eligible for a paid holiday on eleven of the gazetted holidays. In addition. Malaysian authorities can appoint extra public holidays for a particular year under the Holidays Act 1951, making a separate announcement. Thus, for example, Malaysians have enjoyed an extra holiday on July 30, 2019, in connection with the coronation of the Yang di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah.

If the employers are unable to grant the leave on public holiday due to the business needs, they shall provide paid leave on another day as a substitution. In the same way, if a public holiday falls within the period when an employee is on sick leave or annual leave, the employer shall provide leave on another day as a substitution.

Annual Leave

In Malaysia, the employees are entitled to paid annual leave, which depends on the period of employment as follows:

  • 8 days per year for employees who have worked 1-2 years,
  • 12 days per year for those who have worked 2-5 years,
  • 16 days per year for employees who have worked longer than 5 years.

Those who have worked for less than a year are not eligible to paid leave unless they leave the company in which case their paid leave will be prorated. For example, the employees who have worked for 6 months and are leaving the company are eligible for 4 days of paid annual leave.

It must be noted that the law waives the right for paid annual leave for employees who were absent from work without permission and a reasonable excuse for more than ten percent of working time.

Sick Leave

The number of paid sick days in Malaysia also depends on the duration of employment. Thus, those employees whose illness doesn’t require hospitalization are entitled to:

  • 14 days per year if employed for 1-2 years,
  • 18 days per year if employed 2-5 years,
  • 22 days per year if employed longer than 5 years.

The illness should be confirmed by the medical practitioner, medical officer, or dental surgeon. At the same time, the employees should inform their employers on sick leave during 48 hours after commencement or be deemed absent from work without reasonable excuse.

If the illness is more serious and requires hospitalization, the employees receive 60 days of paid sick leave in total, notwithstanding the period of employment.

Maternity Leave

The law also provides paid leave entitlements to women in connection with pregnancy. According to the Employment Act 1955, a female employee involved in the private sector has been entitled to a total of 60 consecutive days of maternity leave while public sector employees were entitled to 90 days.

The changes to these regulations were proposed during the approval of Budget 2020, which presumed the same duration of maternity leave for both private- and public- sector employees.

Following the approval, the Human Resources Ministry of Malaysia has announced that it will take measures against those employers who are not following the updated regulations, although the new rules are to take effect only in 2021.

Optional Leave Entitlements

In addition to compulsory leave entitlements, there are other types of leave in Malaysia, which are generally unpaid and are subject of approval by the employers. These include:

  • paternity leave: public workers are eligible for 7 days of paid paternity leave, provided under the Pekeliling Perkhidmatan Bilangan 9 Tahun 2002, while private-sector employees are not eligible and can take only unpaid leave. Note, that this might change as the lawmakers are reviewing the initiatives of granting 3-7 days of paid paternity leave as of the date of this publication.
  • compassionate or bereavement leave: usually granted for 1-3 days.
  • marriage leave: may be granted for 1-3 days.
  • study leave: subject to employers’ approval, granted for the period of employee training or examination.

Other Considerations

Although the Employment Act 1955 sets an upper-income limit for being qualified as an employee in Malaysia, this doesn’t mean your employer has no legal coverage if your salary exceeds RM2,000.

If this is a case and you have a dispute with your employer, you can file a complaint under the Industrial Relations Act, which governs the employment contract and dismissal procedures. Still, since the Industrial Relations Act doesn’t provide leave entitlement, such terms are subject to approval in the employment contract.

It should also be noted that the Employment Act 1955 covers only those cases related to Peninsular Malaysia and Labuan Federal Territory. The employment in Sabah and Sarawak states is regulated by corresponding labor ordinances. Since the above report describes regulations present in the Employment Act 1955, those who are working or seek employment in the above-mentioned states of Malaysia should consult corresponding sources.

Summary

The employment legislation in Malaysia provides several types of paid leave entitlement to employees. Meanwhile, only manual workers, notwithstanding their salary, as well as non-manual workers with the salary not exceeding RM2,000 per month, are considered as employees according to the law. The leave provisions for those whose monthly income exceeds the above figure are defined solely by their employment contracts.

In light of this, it’s worthwhile to know the general leave entitlements in Malaysia to make the contract terms equivalent to or even better than those provided by the law.  Due to the intricacies of labor legislation and a number of possible scenarios, you might want to contact a lawyer who will check your contract and advise on possible outcomes.